Sen. Rand Paul of Kentucky wants the Senate to grill Janet Yellen, nominated by President Barack Obama to replace Ben Bernanke as the next head of Federal Reserve, to call attention to how Fed policy has contributed to the nation's economic woes.
"I intend on using the Senate's constitutional power of consent to nominations as a means to educate the American people on the structural flaws and policies of the Fed that are bankrupting our nation," Paul wrote in Time.
"The Fed's favored practice of 'quantitative easing' has been questionable at best. One need not be an economist or mathematician to wonder whether printing money out of thin air is a sound way to help the economy," says Paul.
Paul worries that Yellen could drive monetary policy further down this "mad" road.
"When the economy doesn't improve, what is the Fed's eternal answer? Print even more money. In 2013, the Fed has been purchasing – and monetizing the government's debt – at a rate of $85 billion a month."
Paul says the only way he will vote to confirm her nomination is if she convinces him of her readiness to reform the "historically irresponsible" Fed.
Paul has introduced legislation that would bring the Fed under tighter Congressional oversight including regular audits.
The function of the central bank is to foster employment and price stability , according to its Congressional mandate.
Paul belongs to the Friederich Hayek school of economics which is critical of the way the Fed purchases Treasury bonds and mortgage-backed securities with money that does not come out of any finite account.
The central bank would defend its printing of virtual money as the best way to keep the economy afloat, interest rates low and unemployment down, Timothy Carney sums up in The Washington Examiner.
Pual believes the "secretive" Federal Reserve is structurally flawed and needs to be reformed to prevent it from nurturing big government.
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